Merck and Gilead Can Both Reward Investors

You've got to pay up for quality. At least that's what Merck was thinking with its latest acquisition.

Merck (ticker: MRK) announced Monday that it agreed to pay $3.8 billion in cash to acquire Idenix Pharmaceuticals (IDIX), a move that is the latest example of the high value that drug makers are placing on the market for hepatitis C treatments. Idenix is developing IDX437 and several other experimental hepatitis C drugs. Merck is...